Forex trading Article Collection

I often talk to people who are in trouble with their account balance. They never skip asking this question “Where is XXX/YYY going” Come on. If you don’t know the answer to that question you shouldn’t be trading in the forex market. The answer is simple. It shouldn’t matter.

That’s right. It doesn’t matter. If you have so much tied up in a single trade that you are willing to take someone else’s recommendations on a trade, you are screwed. I shouldn’t have to be this blunt but I am only telling you the truth. If you haven’t found a strategy that takes advantage of the markets movements and establishes guidelines that are set in stone, you may as well close your accounts, withdraw your cash, take it to the sink disposal, turn it on and throw your money in it. Believe me you will feel much less pain doing it this way.

If however you want to trade a different way, then here it is.

First: Open a few different accounts with one broker. Keep the majority of your money in one account and transfer smaller amounts into the others. The small accounts are your risk capital. I know traders that have hung onto one trade with one lot all the way to the margin call. That is asinine. Limit your exposure and you will never do that.

Second: Find a system that is accurate 75% to 80% of the time. This isn’t hard to do and there are plenty of them out there. Don’t be foolish though and fall for the robots, they have floating targets. You need a fixed target and a measurable distance between the entry and exit.

Third: This one is going to make you think. Stack trades all the way to the target. If you aren’t familiar with stacking, the basics are to take additional trades in incrementally larger sizes the closer price gets to your target. Just before the target is hit, you should have every single available usable margin used up.

Do not trade this without back testing your strategy to determine the amount of draw down. Take all your profits and move them out of the risk capital accounts every time. Do not let it ride on the next trade. The idea is to maximize your profitable trades and limit your losing trades. Doing this will accomplish two things. You will limit your exposure to any signal given trade because the risk capital account is only a fraction of your entire available capital. You will also maximize the amount you make from a system that you have back tested and know its reliability.

Learning to Trade Forex is Learning Self Control. Here is a system that is accurate enough to stack. It gives you an entry and exit point and you limit your exposure by using risk capital accounts. http://easyfxtrades.com/

Author: Kimball Hall
Article Source: EzineArticles.com
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